The U.S. Securities and Exchange Commission (SEC) has recently decided to postpone the verdict on staking and in-kind redemption for Ethereum (ETH) ETFs. The agency has requested more time to review the staking application for two Grayscale spot ETH ETFs, extending the deadline to June 1st. This application was initially submitted in February by the issuer.
Several other prominent players in the industry, such as Bitwise, VanEck, 21Shares, Fidelity, Invesco Galaxy, and Franklin Templeton, have also applied for similar staking provisions for their respective ETH ETF products. Interestingly, BlackRock is the only major player that has not yet applied for the same, although Robert Mitchnick, the head of digital assets at BlackRock, has acknowledged the advantages of staking for their products.
Additionally, the SEC has postponed decisions on in-kind creation and redemption for both ETH and BTC ETFs. In-kind redemption, unlike the current cash settlements mandated by the SEC, involves using underlying assets like ETH or BTC, thus avoiding taxable events and enhancing liquidity. The deadline for the in-kind decision has been pushed to June 3rd.
The SEC’s crypto task force has engaged in roundtable discussions with key industry players, including Jito, MultiCoin Capital, and BlackRock, to address concerns related to crypto ETF staking and in-kind redemption.
Despite the regulatory updates, the speculative interest in ETH has not seen a significant change. According to Coinglass data, Open Interest (OI) in ETH has been declining since February, dropping from nearly $26 billion to below $20 billion. This persistent bearish sentiment has been reflected in the 4-hour price chart, where ETH has formed a bearish rising wedge pattern that could potentially push the price below $1500. However, reclaiming the $1.8K mark could signal a bullish trend for the cryptocurrency.
In conclusion, while the SEC’s decision on ETH ETF staking and in-kind redemption has been delayed, the industry continues to monitor developments closely to assess the impact on the market. Stay tuned for further updates on this evolving regulatory landscape.